I'm a multiple-time entrepreneur, living and working in the heart of Silicon Valley for the past quarter century. Currently, I spend most of my time working on a new startup in the online education arena. I've got a BA in political science and an MBA from Stanford. Having been around technology and business on the leading edge, I write mostly about what's new and what's coming for companies and the country. You can find me on Facebook, Twitter and Google+ You can e-mail me at forbes_at_rogodotnet

PS4: This Looks Familiar

It’s no secret that the console-gaming business hasn’t exactly been setting the world on fire of late. IDC says that as of January Sony’s PS3 (77 million sold) surpassed Microsoft’s Xbox 360 (at 76 million). But the consoles were introduced in 2006 and 2005 respectively, and not a lot of those sales have come lately. Today’s announcement of the PS4 — Sony’s next-generation console — comes after the longest period between product introductions in the history of the videogame industry. It’s the struggling Japanese giant’s latest, best hope to recapture some of the magic that vaulted it to the top when the original Playstation launched in 1994. But is it too late to matter?

First, let’s get some praise out of the way. The technical capabilities of PS4 look terrific. (The machine itself? Who knows. In a two-hour event Sony never did manage to display a Ps4!) Sony showed off plenty of demos at the introduction and I have no doubt some of the finished product will be state-of-the-art console gaming. Additionally, the company is saying all the right things about online gaming and using their handheld Vita as a “client” device to the PS4, giving Sony similar capabilities to what Nintendo has delivered with its recently introduced Wii U.

But the Wii U is kind of a bust, setting the wrong kind of records for console sales (as in record lows). That’s especially troublesome for a new product. And while Sony is unlikely to do the same kind of face-first fall that Nintendo has, it’s worth remembering that in the last round the winning console was, in fact, Nintendo’s Wii, which recently surpassed the 100 million mark. Nintendo won for two primary reasons (1) it had the first-of-its-kind Wii Remote controller, which allowed you to do things like swing a virtual tennis racket through the air or pretend to bowl and (2) largely as a result of that controller it reached a number of people who weren’t traditional gamers, both young and old.

Wii, in short, was revolutionary and both Sony and Microsoft had to react. Sony’s Move controller was a knockoff. Microsoft’s Kinect, while imperfect, was a revelation: control without any controller at all. Watching today’s PS4 announcement, one couldn’t help but wonder where the equivalent of Kinect was. What’s the one feature that’s going to get people to run out and buy PS4; that’s going to reignite interest in console gaming? It simply wasn’t there.

Instead, we saw a lot of game developers showing unfinished demos and Sony touting as one of its big “gets” that Blizzard Entertainment, part of gaming giant Activision, will bring the hugely popular Diablo III to the PS4. Of course, they’ll also bring it to the aging PS3. Oh, and Diablo 3 is hugely popular because it’s already been available on PC and Mac since last May. This isn’t something new, it’s something kind of nice. And something “kind of nice” is actually where the center of gaming has moved in the past couple of years.

Which brings us back to that second Nintendo success factor: more people are gaming than ever. It’s just that now they’re just doing it on smartphones and iPads. Phenomena like Angry Birds and Words with Friends may not have the spectacular graphics of a PS4 game, but they have sometimes hundreds of millions of players worldwide. And the commitment can be as little as downloading an ad-supported app to your phone while waiting on line at the DMV. For Activision, which owns blockbusters like the Call of Duty franchise (a single title makes hundreds of millions) and the aging but still very profitable World of Warcraft multi-player game (with 10 million people paying a monthly subscription), this trend hasn’t been especially important. For everyone else in gaming, including struggling Zynga, it has been.

So while PS4 looks cool, it looks a lot like a better PS3, without a killer feature like the BluRay drive that helped bring the previous console into many homes the last time around. The controller isn’t especially exciting and the online capabilities are mostly a refinement of what you can already get. In the meantime, the barbarians are already in people’s pockets and purses and are threatening the living room, too. A startup called Ouya raised more than $10 million on Kickstarter to create a new console that will play Android games and promises to come out with a new model every year for $99. (Sony didn’t announce pricing). They launch this June with a slate of 500 games. Maybe they won’t all be Diablo 3, but then you’ll probably be able to pick up 30 of them for less than the cost of one Ps4 title.

Apple also looms in the background. The iPhone is especially successful with casual gamers and the co-founder of online gaming company Valve thinks Apple could “roll the console guys really easily” using a device like the AppleTV as the way into the living room. Whether that’s in the offing, the reality is that competition for people’s dollars is high, with options like tablets not existing a few years ago. And competition for attention spans is even higher thanks to app stores, Facebook games, Netflix, and endless-channel television. PS4 might be technically great. But great might not be good enough.

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While the Wii U’s sales in January are lackluster, it is worth noting that the Wii U’s total sales are STILL above BOTH the XBox 360 and the PS3′s sales at this point in the product cycle (three months in). If the Wii U’s sales are “bad” (which this article seems to imply) then the other consoles will have -awful- sales. Comparing to the Wii just isn’t realistic, and its not a reasonable way to report sales. Its just bad journalism.

Also, the whole casual gaming thing… well, its kind of irrelevant. The Wii, yeah, its great for getting new people to buy consoles, but it isn’t actually great for getting new people to buy the same sort of games that other gamers buy. They’re expanding the number of people they can sell the hardware to, but a lot of those people play Wii Sports and Wii Fit and… well, that’s it really. They might pick up the odd Nintendo game, but it does nothing to expand the audience for, say, Call of Duty or similar games.

Likewise, the whole handheld thing – people have always bought handhelds in droves, and the fact that everyone has a smart phone means that everyone can buy games on them… but, really, is this relevant to gaming? People have played little throwaway things like this, but they’re, again, a very different sort of game and for every Angry Birds there are a hundred or more games that never get off the ground and no one cares about. Chasing that market seems a bit dangerous really – you spend little money but there’s a not unreasonable chance you get essentially nothing for it.

So as for the sales history, PS3 sold 1 million units in the first 6 weeks in North America. That’s more than twice as strong a launch as Wii U, despite a much higher launch price. Xbox 360 sold 600,000 units in its launch period, which seems decent compared to Wii U, right?

However, Wii U went from 460,000 in December to an estimated 50,000 in January. As reported on The Verge, “That would mean the Wii U performed worse in January than the Xbox 360 or PlayStation 3 did in any single month throughout their entire lifespan.”

This is bad news on a brand-new console and is, in fact, a record. Apparently, not even GameCube or Dreamcast ever sold so poorly.

I’m not going to pretend an article I wrote in about an hour is as scrupulously researched as a front-pager for the Wall Street Journal, but it was researched. When I make mistakes, please call me out on them. And thanks for reading and commenting.

Poor Wii U sales are probably due to the crappy launch titles. If the system launch had included one of Nintendo’s flagship titles (Zelda, Mario Kart, Mario Galaxy) and sales were still lackluster, that *may* portend the decline of console gaming. (And no, New Super Mario Bros is not a flagship title.)

actually your both right on the sales, the wii u has sold less in NORTH AMERICA but has sold more GLOBALLY then ps3 and xbox 360 did when they launched, its a global economy now and if you can only sell in north america your not doing so hot. The world is in a recession and people don’t feel like paying $300-$350 for a brand new console when half don’t know what it is and half would rather buy a ps3 or xbox 360 for less. IMO if ps4 sells for more than $450 they’ll sell worse than the wii u has, wii u at least has a zelda and other first party ip’s up its sleeve

This is the worst article i have ever read. you mean to say that in future instead of playing the new epic GT6 and killzone 4 on ps4 which will be worth every penny i should play gameloft’s modern combat and asphalt?? amazing you are, amazing. GO play your gameloft’s titles on your phone while i enjoy my uncharted.. ^_^

The wii u sales are terrible, setting a record low for consoles… The wii u sales are way better than the xbox 360 and ps3 when they first came out. Also no real gamer is going to go out and buy an ouya. I gurantee it won’t hit more than 5 million units.

Not a Sony fanboy at all, in fact I own all consoles. With that said, this article reads like it was written by a Microsoft or Nintendo employee. That conference was VERY impressive, a lot more than what I was expecting at least.

I’m sorry but this is stupid. Yeah millions of people now play silly little games on their smartphones and peoples Grans and 7year old girls all bought the Nintendo Wii, but thats not proper gaming. The Wii had no lasting appeal, it was just a fad and although games on smartphones can be fun and addictive, they have nothing on the truely great cinematic and lifelike experiences that have been had on the ps3 and xbox. What the people are really interested in is how the technology will affect the games we play and how epic they will be